Grant of Individual Exemptions; Smart Retirement The OLDE 401(k) Plan

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 98-25; Exemption Application No. D-

10410, et al.]

Grant of Individual Exemptions; Smart Retirement The OLDE 401(k)

Plan

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of Individual Exemptions.

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SUMMARY: This document contains exemptions issued by the Department of

Labor (the Department) from certain of the prohibited transaction

restrictions of the Employee Retirement Income Security Act of 1974

(the Act) and/or the Internal Revenue Code of 1986 (the Code).

Notices were published in the Federal Register of the pendency

before the Department of proposals to grant such exemptions. The

notices set forth a summary of facts and representations contained in

each application for exemption and referred interested persons to the

respective applications for a complete statement of the facts and

representations. The applications have been available for public

inspection at the Department in Washington, DC. The notices also

invited interested persons to submit comments on the requested

exemptions to the Department. In addition the notices stated that any

interested person might submit a written request that a public hearing

be held (where appropriate). The applicants have represented that they

have complied with the requirements of the notification to interested

persons. No public comments and no requests for a hearing, unless

otherwise stated, were received by the Department.

The notices of proposed exemption were issued and the exemptions

are being granted solely by the Department because, effective December

31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR

47713, October 17, 1978) transferred the authority of the Secretary of

the Treasury to issue exemptions of the type proposed to the Secretary

of Labor.

Statutory Findings

In accordance with section 408(a) of the Act and/or section

4975(c)(2) of the Code and the procedures set forth in 29 CFR Part

2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon

the entire record, the Department makes the following findings:

(a) The exemptions are administratively feasible;

(b) They are in the interests of the plans and their participants

and beneficiaries; and

(c) They are protective of the rights of the participants and

beneficiaries of the plans.

SmartRetirement: The OLDE 401(k) Plan (the Plan), Located in

Detroit, MI

[Prohibited Transaction Exemption 98-25; Application No. D-10410]

Exemption

Section I. Covered Transactions

The restrictions of sections 406(a)(1) (B) and (D) and 406(b) of

the Act and the sanctions resulting from the application of section

4975 of the Code, by reason of section 4975(c)(1) (B), (D), (E) and (F)

of the Code, shall not apply, (1) effective October 4, 1996, to the

past and continuing receipt, by OLDE Discount Corporation (OLDE

Discount), a wholly owned subsidiary of OLDE Financial Corporation

(OLDE Financial), the Plan sponsor, of a portion of certain

distribution fees that are paid by third party mutual funds (the Funds)

to OLDE Discount pursuant to Rule 12b-1 (Rule 12b-1; the 12b-1 Fees)

under the Investment Company Act of 1940 (the 1940 Act) and which are

attributable to Plan assets that are invested in the Funds; and (2) the

proposed cash rebate of such 12b-1 Fees, by OLDE Discount, to either

the Plan or to the individually-directed accounts (the Accounts) of the

participants in the Plan.1

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\1\ Unless otherwise noted, OLDE Financial and its affiliates

are collectively referred to herein as OLDE.

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The transactions are conditioned on the requirements set forth

below in Section II.

Section II. General Conditions

(a) The decision to invest the assets of an Account in the Funds is

made by a Plan participant and not by OLDE nor is OLDE providing

``investment advice'' to the participant within the meaning of section

3(21) of the Act.

(b) No sales commissions, other than 12b-1 Fees, are paid by an

Account in

[[Page 31529]]

connection with the purchase or sale of shares in the Funds and no

redemption fees are paid by an Account with respect to the sale of

shares of the Funds.

(c) The Plan, or if applicable, Account, receives a rebate from

OLDE Discount in the form of cash equal to such Plan's or Account's pro

rata portion of all 12b-1 Fees received by OLDE Discount from the Funds

under a rebate program (the Rebate Program).

(d) For purposes of the Rebate Program:

(1) During the course of each calendar year, as it receives 12b-1

Fees from the Funds, OLDE Discount calculates that portion of the 12b-1

Fees that are attributable to the Plan, including interest based on the

Federal Funds Rate plus 2 percent.

(2) Within 30 days of receipt by OLDE Discount of the 12b-1 Fees,

OLDE Discount separates and transfers the Plan's allocable portion of

the 12b-1 Fees, together with interest earned on such fees (as

determined in Step 1 above), to a money market account that has been

established in the Plan's name with an unrelated bank, Comerica Bank of

Detroit, Michigan (Comerica).

(3) The Plan may draw upon its Comerica money market account during

the course of the year for the purpose of paying the Plan's

administrative expenses owed to third parties.

(4) Immediately following the end of each calendar year, any

remaining rebated 12b-1 Fees that are not drawn upon, after the payment

of the Plan's administrative expenses, are allocated by the Plan to the

participant Accounts.

(5) OLDE establishes and maintains a system of internal and

external accounting controls for the Rebate Program.

(6) OLDE retains an independent auditor outside of the control of

OLDE to audit, on an annual basis, OLDE Discount's rebating of 12b-1

Fees to either the Plan or the Accounts.

(e) Prior to purchasing shares of the Funds, each Plan participant

receives full written disclosure of information concerning the Funds,

including, but not limited to, the following:

(1) A communications document containing a general overview of the

Plan, the types of investment Funds available, a listing of each

specific Fund alternative and its investment objective, which directs

the participant to request, either from the Fund or from OLDE,

prospectuses for those Funds in which participant is interested in

investing.

(2) Standard & Poor's reports on all of the Funds on OLDE's

company-wide Intranet which participants may access and print on

demand.

(3) If requested by the participant, copies of applicable

prospectuses for the Funds discussing the investment objectives of the

Funds, the policies employed to achieve these objectives, the

relationship, if any, existing between OLDE Discount with the parties

who act as sponsors, distributors, administrators, investment advisers

and sub-advisers, custodians and transfer agents to the Funds and a

statement describing the fee structure and the 12b-1 Fees. (OLDE will

supplement such disclosures with information describing the Rebate

Program.)

(4) Upon written or oral request to OLDE, a statement of additional

information supplementing the applicable prospectus, which describes

the types of securities and other instruments in which the Funds may

invest, the investment policies and strategies that the Funds may

utilize, including a description of the risks.

(5) Upon written request to OLDE, a copy of OLDE Discount's

distribution agreements pertaining to the various Funds.

(6) Copies of the proposed exemption and grant notice describing

the exemptive relief provided herein.

(f) After receiving the disclosures noted above, the participant

acknowledges receipt of the documents in writing and provides

authorization to OLDE with respect to investing in the Funds. However,

for Fund purchases occurring prior to the date this final exemption is

granted, the acknowledgement and authorization are given by a

participant at the time of and as part of the next proposed investment

change by such participant.

(g) Each additional purchase or redemption of shares in the Funds

is directed by the participant, provided OLDE makes available to the

participant, copies of the applicable Fund prospectus and disclosures

regarding the fee structure and the 12b-1 Fees.

(h) Each Plan participant receives the following written or oral

disclosures from OLDE with respect to ongoing investment in the Funds:

(1) Written confirmations of each purchase or redemption

transaction involving shares of a Fund.

(2) Telephone quotations of such participant's Account balance.

(3) A monthly statement of account specifying the net asset value

of the assets in a participant's Account, a summary of current year

contributions, contributions since inception, beginning and ending

account balances, summaries of contributions, purchases and sales

during the month, a summary of the participant's final Account

portfolio, aggregate 12b-1 Fees paid to OLDE Discount, and, to the

extent applicable during one month per year only, any rebated fees that

are allocated to the participant's Account.

(4) Semiannual and annual reports that include financial statements

for the Funds.

(5) Investment performance histories and other information provided

by the Funds to OLDE;

(6) Ratings information received about the Funds from independent

sources such as Morningstar;

(7) Responses to oral or written inquiries of participants upon

request.

(i) The terms of each purchase or redemption of shares in the Funds

remain at least as favorable to an Account as those obtainable in an

arm's length transaction with an unrelated party.

(j) OLDE maintains for a period of six years the records necessary

to enable the persons described below in paragraph (k) to determine

whether the conditions of this exemption have been met, except that (1)

a prohibited transaction will not be considered to have occurred if,

due to circumstances beyond the control of OLDE, the records are lost

or destroyed prior to the end of the six year period, and (2) no party

in interest, other than OLDE, shall be subject to the civil penalty

that may be assessed under section 502(i) of the Act or to the taxes

imposed by section 4975(a) and (b) of the Code if the records are not

maintained or are not available for examination as required by

paragraph (k) below; and

(k)(1) Except as provided in paragraph (k)(2) and notwithstanding

any provisions of section 504(a)(2) and (b) of the Act, the records

referred to in paragraph (j) are unconditionally available at their

customary location for examination during normal business hours by--

(A) Any duly authorized employee or representative of the

Department, the Internal Revenue Service or the Securities and Exchange

Commission (the SEC), and

(B) Any participant or beneficiary of the Plan or duly authorized

employee or representative of such participant or beneficiary;

(2) None of the persons described in paragraph (k)(1)(B) shall be

authorized to examine trade secrets of OLDE, or commercial or financial

information which is privileged or confidential.

III. Definitions

For purposes of this exemption:

(a) The term OLDE means OLDE Financial Corporation and any

affiliate

[[Page 31530]]

of OLDE Financial, as defined in paragraph (b) of this Section III.

(b) An affiliate of OLDE includes--

(1) Any person directly or indirectly through one or more

intermediaries, controlling, controlled by, or under common control

with OLDE.

(2) Any officer, director or employee or relative of such person,

or partner in any such person; and

(3) Any corporation or partnership of which such person is an

officer, director, partner or employee.

(c) The term control means the power to exercise a controlling

influence over the management or policies of a person other than an

individual.

(d) The term participant includes participants in the Plan and

their beneficiaries who may invest in the Funds.

(e) The term Fund or Funds means any open-end management investment

company or companies registered under the 1940 Act for which OLDE

Discount provides distribution and related services.

(f) The term net asset value means the amount calculated by

dividing the value of all securities, determined by a method as set

forth in a Fund's prospectus and statement of additional information,

and other assets belonging to each of the portfolios in such fund, less

the liabilities chargeable to each portfolio, by the number of

outstanding shares.

(g) The term relative means a relative as that term is defined in

section 3(15) of the Act (or a member of the family as that term is

defined in section 4975(e)(6) of the Code), or a brother, a sister, or

a spouse of a brother or a sister.

EFFECTIVE DATE: This exemption is effective as of October 4, 1996 with

respect to transactions involving the past and continuing receipt, by

OLDE Discount, of 12b-1 Fees that are attributable to the Plan from the

Funds. However, it is prospective for transactions involving the cash

rebate, by OLDE Discount, of such fees to either the Plan or to the

Accounts.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption (the Notice) published on February 26,

1998 at 63 FR 9863.

Written Comments

The Department received two written comments with respect to the

Notice and no requests for a public hearing. The first comment, which

was submitted by employees of OLDE Discount, was in favor of the

exemption and urged that it be granted. The second comment was

submitted by OLDE and suggested clarifications to ambiguities in the

conditional language of the Notice and the Summary of Facts and

Representations (the Summary). Presented below are OLDE's comments and

the Department's accompanying responses.

1. Section 406(a) Exemptive Relief

The operative language of the Notice provides exemptive relief from

the restrictions of section 406(b) of the Act and the sanctions

resulting from the application of section 4975 of the Code, by reason

of section 4975(c)(1)(E) and (F) for the covered transactions. However,

in its comment, OLDE has requested that the Department expand the scope

of the Notice to include exemptive relief from section 406(a) of the

Act and the corresponding sections of the Code.

The Department agrees with OLDE's comment and has revised the

operative language of the Notice to include exemptive relief from

section 406(a) of the Act and the corresponding sections of the Code.

Specifically, the Department has amended the Notice to include

exemptive relief from section 406(a)(1)(B) of the Act and section

4975(c)(1)(B) of the Code under the theory that the 30 day time lag

between OLDE Discount's receipt of 12b-1 Fees from the Funds that are

attributable to the Plan and the transfer of such fees to the Comerica

money market established in the Plan's name, could be construed as a

prohibited extension of credit between the Plan and OLDE Discount. In

addition, the Department has revised the Notice to include exemptive

relief from section 406(a)(1)(D) of the Act and section 4975(c)(1)(D)

of the Code under the premise that the covered transactions may be

considered prohibited transfers to OLDE Discount of assets of the Plan

inasmuch as the Plan's allocable portion of the 12b-1 Fees are

ultimately borne by the Plan through internal mutual fund expenses that

reduce the Plan's earnings.

2. Section II(c)

Section II(c) of the Notice refers to ``12b-1 Fees charged by OLDE

Discount to the Funds.'' As a technical matter relating to the nature

of 12b-1 Fees, OLDE wishes to clarify that OLDE Discount does not

charge the Funds for 12b-1 Fees. Instead, OLDE suggests that the

Department reword this phrase to read as follows: ``12b-1 Fees received

by OLDE Discount from the Funds.'' In response, the Department has made

the requested change to Section II(c) of the Notice.

3. Section II(e)(1) and Representation 11

OLDE states that Section II(e)(1) of the Notice and Representation

11 of the Summary indicate that prior to purchasing shares in the

funds, each Plan participant will receive copies of all applicable

prospectuses for the Funds. Because there are in excess of 50 Funds

available under the Plan, OLDE represents that this would require that

OLDE provide in advance to all participants more than 50 prospectuses.

Instead, OLDE would prefer to make all prospectuses available to

participants upon their request. In addition, OLDE explains that it

would automatically provide an applicable prospectus to a participant

who elects to invest in a specific Fund.

To inform participants of Fund options, OLDE represents that it has

developed a communications document for employees which gives a general

overview of the Plan, the types of investment Funds available and a

listing of each specific Fund alternative and its investment objective.

OLDE explains that the communications document urges participants to

request, either from the Fund houses or from OLDE's human resources

department, prospectuses for those Funds in which participants are

interested in investing prior to investing in the Funds. In this way,

OLDE believes that it can provide relevant materials to each

participant. In addition, OLDE states that it makes available Standard

& Poor's reports on all of the Funds on its company-wide Intranet which

participants may access and print on demand.

The Department does not wish to create an unwieldy result by

requiring that OLDE provide each participant more than 50 prospectuses

in advance of such participant's purchase of Fund shares. Rather, the

Department wishes to clarify that this condition and the corresponding

language in Representation 11 relate to OLDE's provision to a Plan

participant of ``applicable'' prospectuses, meaning prospectuses for

those Funds in which the participant may contemplate investing and not

all of the prospectuses that may be available for the Funds offered

under the Plan. Although the Department expects that a participant will

receive a copy of an applicable prospectus before investing in the

Funds, it believes that the different strategies adopted by OLDE help

to satisfy this objective. Therefore, the Department has revised

Section II(e) of the Notice in its entirety as follows:

(e) Prior to purchasing shares of the Funds, each Plan

participant receives full written disclosure of information

concerning the

[[Page 31531]]

Funds, including, but not limited to, the following:

(1) A communications document containing a general overview of

the Plan, the types of investment Funds available, a listing of each

specific Fund alternative and its investment objective, which

directs the participant to request, either from the Fund or from

OLDE, prospectuses for those Funds in which participant is

interested in investing.

(2) Standard & Poor's reports on all of the Funds on OLDE's

company-wide Intranet which participants may access and print on

demand.

(3) If requested by the participant, copies of applicable

prospectuses for the Funds discussing the investment objectives of

the Funds, the policies employed to achieve these objectives, the

relationship, if any, existing between OLDE Discount with the

parties who act as sponsors, distributors, administrators,

investment advisers and sub-advisers, custodians and transfer agents

to the Funds and a statement describing the fee structure and the

12b-1 Fees. (OLDE will supplement such disclosures with information

describing the Rebate Program.)

(4) Upon written or oral request to OLDE, a statement of

additional information supplementing the applicable prospectus,

which describes the types of securities and other instruments in

which the Funds may invest, the investment policies and strategies

that the Funds may utilize, including a description of the risks.

(5) Upon written request to OLDE, a copy of OLDE Discount's

distribution agreements pertaining to the various Funds.

(6) Copies of the proposed exemption and grant notice describing

the exemptive relief provided herein.

In addition, the Department has made similar changes to Representation

11.

4. Section II(f) and Representation 11

OLDE represents that Section II(f) of the Notice and Representation

11 of the Summary indicate that participants will acknowledge receipt

of the disclosure documents and will provide authorization to OLDE with

respect to investing in the Funds. As to the timing of this

acknowledgement and authorization, OLDE believes that most workable

mechanism is to have each Plan participant provide the acknowledgement

and authorization on the next occasion on which such participant makes

a written election with regard to Plan investments, given the

retroactive nature of the exemption request and to avoid potential

participant inaction if OLDE mailed acknowledgment/authorization forms

to each Plan participant. Under the alternative proposed, OLDE notes

that this would generally be the date that the participant next elects

to modify his or her investment choices.

The Department has considered this comment and has redrafted

Condition I(f) to read as follows:

(f) After receiving the disclosures noted above, the participant

acknowledges receipt of the documents in writing and provides

authorization to OLDE with respect to investing in the Funds.

However, for Fund purchases occurring prior to the date this final

exemption is granted, the acknowledgement and authorization are

given by a participant at the time of and as part of the next

proposed investment change by such participant.

5. Section II(g) and Representation 11

OLDE states that section II(g) of the Notice requires that OLDE

``makes available to the participant, copies of the applicable Fund

prospectuses and disclosures regarding the fee structure and the 12b-1

Fees.'' OLDE points out that a similar requirement is included in

Representation 11 of the Summary. Although OLDE interprets the phrase

makes available to mean informing participants of the availability of

these items and providing them to participants upon request, it wonders

whether its assumptions are correct.

In response, the Department concurs with the construction given by

OLDE to this phrase.

6. Section II(h)(1) and Representation 11

OLDE represents that Section II(h)(1) of the Notice and

Representation 11 of the Summary require written confirmation of each

purchase or redemption transaction involving shares of a Fund. OLDE

proposes that the confirmation requirement be satisfied by the

participant's receipt of his or her next monthly statement detailing

each transaction. The Department concurs with this approach.

7. Section II(h)(4) and Representation 11

OLDE represents that Section II(h)(4) of the Notice and

Representation 11 of the Summary require that semiannual and annual

reports be provided to participants that include financial statements

for the Funds as well as fees paid to OLDE Discount. Although the Funds

provide semiannual and annual reports to those participants investing

in the Funds, OLDE wishes to clarify that it intends to list aggregate

12b-1 Fees paid to OLDE Discount as separate informational items on

monthly statements provided to participants.

In response, the Department concurs with this approach because it

will allow participants to review aggregate 12b-1 Fees that are paid to

OLDE Discount on a monthly basis. This should satisfy the requirement

that OLDE Discount provide such information both semiannually or

annually to Plan participants. Therefore, to reflect these changes, the

Department has revised Section II(h)(3) and (4) of the Notice to read

as follows:

(3) A monthly statement of account specifying the net asset

value of the assets in a participant's Account, a summary of current

year contributions, contributions since inception, beginning and

ending account balances, summaries of contributions, purchases and

sales during the month, a summary of the participant's final Account

portfolio, aggregate 12b-1 Fees paid to OLDE Discount, and, to the

extent applicable during one month per year only, any rebated fees

that are allocated to the participant's Account.

(4) Semiannual and annual reports that include financial statements

for the Funds.

In addition to the above, the Department has made corresponding

modifications to Representation 11 of the Summary.

8. Representation 1

OLDE points out that the third sentence of Representation 1 of the

Summary states that ``The Funds have been offered to the plan at no

load pursuant to agreements with the Fund sponsors.'' OLDE believes

that, consistent with the disclosures under applicable securities laws,

this sentence should be amended to read as follows: ``The Funds have

been offered to the Plan at net asset value pursuant to agreements with

the Funds' sponsors.''

In response to OLDE's suggestion, the Department has revised the

third sentence of Representation 3, accordingly.

9. Footnote 3

OLDE states that Footnote 3 of the Summary lists sample Funds

offered under the Plan and includes a reference to ``The American

Mutual Fund.'' OLDE represents that there is no ``American Mutual

Fund'' offered under the Plan.

In response, the Department agrees to make this change to the

Summary. However, it notes that the reference to ``The American Mutual

Fund'' was included in a Fund listing supplied by OLDE to the

Department.

For further information regarding the comment letters or other

matters discussed herein, interested persons are encouraged to obtain

copies of the exemption application file (Exemption Application No. D-

10410) pertaining to this case. The complete application file, as well

as all supplemental submissions received by the Department, are made

available for public inspection in the Public Documents Room of the

Pension and Welfare Benefits Administration, Room N-5638, U.S.

Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210.

[[Page 31532]]

Accordingly, after consideration of the entire record, including

the comments, the Department has determined to grant the exemption as

modified herein.

For Further Information Contact: Ms. Jan D. Broady of the

Department, telephone (202) 219-8881. (This is not a toll-free number.)

Beer Nuts, Inc. Profit Sharing Plan (the Plan), Located in

Bloomington, Illinois

[Prohibited Transaction Exemption 98-26; Exemption Application No. D-

10531]

Exemption

The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,

shall not apply to the sale (the Sale) by the Plan of certain limited

partnership interests (the Interests) to Beer Nuts, Inc., a party in

interest and a disqualified person with respect to the Plan, provided

that the following conditions were satisfied:

(a) The terms of the Sale were at least as favorable to the Plan as

those obtainable in an arm's length transaction with an unrelated

party;

(b) The Sale was a one-time transaction for cash;

(c) The Plan paid no commissions or other expenses relating to the

Sale; and

(d) The Sale price was not less than the fair market value of the

Interests as determined by a qualified, independent appraiser.

Effective Date: The exemption is effective as of December 30, 1996.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption please

refer to the notice of proposed exemption published on March 31, 1998

at 63 FR 15462.

For Further Information Contact: Mr. James Scott Frazier of the

Department, telephone (202) 219-8891 (This is not a toll-free number).

James E. Jordan, Sr. Individual Retirement Account (the IRA),

Located in Phoenix, Arizona

[Prohibited Transaction Exemption 98-27; Exemption Application No. D-

10550]

Exemption

The sanctions resulting from the application of section 4975 of the

Code, by reason of section 4975(c)(1)(A) through (E) of the Code, shall

not apply to the cash purchase by the IRA of a certain promissory note

issued by unrelated parties (the Martin Note) which is secured by a

first mortgage on certain residential property (the Property) from the

James E. Jordan Revocable Trust Agreement (the Trust), a disqualified

person with respect to the IRA; 2 provided that the

following conditions are met:

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\2\ Pursuant to CFR 2510.3-2(d), the Department has no

jurisdiction with respect to the IRA under Title I of the Act.

However, there is jurisdiction under Title II of the Act pursuant to

section 4975 of the Code.

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1. The purchase of the Martin Note will be a one-time cash

transaction;

2. The IRA will pay no commissions or other expenses associated

with the purchase;

3. The amount paid by the IRA for the Martin Note will be the

lesser of (i) $63,108.97, which is the current fair market value of the

Martin Note as determined by an independent, qualified appraiser, or

(ii) the fair market value of the Martin Note, as determined at the

time of the purchase by an independent, qualified appraiser;

4. Both the amount paid by the IRA for the Martin Note and the

outstanding principal balance on such Note will involve less than 25%

of the IRA's total assets;

5. Mr. Jordan, as the sole participant of the IRA, will be the only

individual affected by the proposed transaction; and

6. On the date the IRA purchases the Martin Note from the Trust,

the IRA will be named as loss payee under the homeowners insurance

policy on the Property.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption refer to

the notice of proposed exemption published on April 22, 1998 at 63 FR

19952.

For Further Information Contact: Ekaterina A. Uzlyan of the

Department at (202) 219-8883. (This is not a toll-free number.)

General Information

The attention of interested persons is directed to the following:

(1) The fact that a transaction is the subject of an exemption

under section 408(a) of the Act and/or section 4975(c)(2) of the Code

does not relieve a fiduciary or other party in interest or disqualified

person from certain other provisions to which the exemptions do not

apply and the general fiduciary responsibility provisions of section

404 of the Act, which among other things require a fiduciary to

discharge his duties respecting the plan solely in the interest of the

participants and beneficiaries of the plan and in a prudent fashion in

accordance with section 404(a)(1)(B) of the Act; nor does it affect the

requirement of section 401(a) of the Code that the plan must operate

for the exclusive benefit of the employees of the employer maintaining

the plan and their beneficiaries;

(2) These exemptions are supplemental to and not in derogation of,

any other provisions of the Act and/or the Code, including statutory or

administrative exemptions and transactional rules. Furthermore, the

fact that a transaction is subject to an administrative or statutory

exemption is not dispositive of whether the transaction is in fact a

prohibited transaction; and

(3) The availability of these exemptions is subject to the express

condition that the material facts and representations contained in each

application accurately describes all material terms of the transaction

which is the subject of the exemption.

Signed at Washington, D.C., this 4th day of June, 1998.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, Department of Labor.

[FR Doc. 98-15289 Filed 6-8-98; 8:45 am]

BILLING CODE 4510-29-P